Though this paper is in a very preliminary stage, I use the data gathered using the Delphi process to discuss some policy instruments that could be of use for emerging economies to create an environment of innovation. I acknowledge fiscal instruments to be an important driver but I choose not to focus on fiscal enablers of innovation rather focusing on how the lack of fiscal incentives can help create a sustainable environment for innovation. I use the early Indian experience and contrast it with later fiscal activism shown by the government to illustrate that perhaps the government need to focus on the supply side of knowledge and let the demand for knowledge and innovation be led by the firms at the local level. I argue this strategy to be the most sustainable in the long run.